COURT OF APPEALS SECOND DISTRICT OF TEXAS FORT WORTH
NO. 2-07-152-CV
TONI SOLANO APPELLANT
V.
LANDAMERICA COMMONWEALTH TITLE OF FORT WORTH, INC., F/K/A COMMONWEALTH LAND TITLE COMPANY OF FORT WORTH; COMMONWEALTH LAND TITLE INSURANCE COMPANY; LANDAMERICA FINANCIAL GROUP, INC., D/B/A COMMONWEALTH LAND TITLE COMPANY OF FORT WORTH APPELLEES
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FROM THE 348TH DISTRICT COURT OF TARRANT COUNTY
MEMORANDUM OPINION
Introduction
Appellant Toni Solano appeals the trial court’s order granting appellees’
no evidence and traditional motions for summary judgment. Appellant challenges various aspects of the trial court’s determinations that she failed to
present evidence establishing a genuine issue of material fact on the elements
of her fraud and Texas Deceptive Trade Practices-Consumer Protection Act
(DTPA) claims and also that appellees were entitled to judgment as a matter of
law based on the summary judgment evidence they presented.1 See Tex. R.
Civ. P. 166a(c), (i). We affirm.
Background Facts
In February 2001, John Solano entered into a contract to purchase real
estate from Alpha Development for the purpose of building a home. The
contract (negotiated at a price just under $50,000) described the property that
Mr. Solano was purchasing as “Lot 43, Block 1, the Hills of Gilmore Creek
1 … Of the sixteen issues raised in her brief, fifteen are listed as stand- alone statements, without any further explanation of the issues presented, any supporting argument, or any associated reference to relevant legal authorities. Many of these fifteen issues substantially relate to the trial court’s decision to grant appellees’ summary judgment motions. Other issues only tangentially relate to the trial court’s decision or relate to parties included as defendants at the trial court level that are not parties to this appeal. Because none of these fifteen issues are adequately briefed, we decline to address them. See Tex. R. App. P. 38.1(h); Gray v. Nash, 259 S.W.3d 286, 294 (Tex. App.—Fort Worth 2008, pet. denied) (deciding that issues were waived because of inadequate briefing). Rather, we will confine our analysis to the sole issue which was adequately briefed—the trial court’s decision to grant appellees’ motion on appellant’s fraud and DTPA claims. Appellant labeled this issue as “Issue 1: The evidence does not support the verdict of the trial court about violations of the DTPA, and the questions about fraud.”
2 Addition, City of Fort Worth, Tarrant County, Texas.” The contract indicated
that Alpha Development was to furnish to Mr. Solano, at its own expense, a
title policy issued by Commonwealth Land and Title (which is the common
name for the related title company entities comprising the appellees). The
contract stated, however, that the title policy would be “subject to the
promulgated exclusions (including existing building and zoning ordinances),” and
a list of other exceptions. The contract also explained that Alpha Development
would provide Mr. Solano with a survey, and that Mr. Solano would have seven
days after receipt of either the title commitment or survey to “object in writing
to matters disclosed,” or such objections would be waived. Finally, the
contract instructed Mr. Solano that it was “intended to be legally binding.
READ IT CAREFULLY. If you do not understand the effect of this contract,
consult your attorney BEFORE signing.” 2
Pursuant to the contract, appellees generated a preliminary title insurance
“order” which described the property by the lot and block numbers contained
in the contract. Appellees then issued a title insurance commitment, which was
“subject to the following terms of the Policy: Insuring Provisions, Conditions
2 … In a subsequent transaction, Mr. Solano obtained $225,000 in financing from Cendant Mortgage Corporation to build his residence on the property he had purchased from Alpha Development.
3 and Stipulations, and Exclusions.” 3 The commitment contained a metes and
bounds description of the property instead of the lot and block number
contained in Mr. Solano’s real estate purchase contract with Alpha
Development. Through attached schedules, the commitment also incorporated
a list of exceptions from coverage, explained that the commitment was “not an
opinion or report” of the title, and noted that further exclusions from coverage
would exist in the final policy though they were not revealed in the
commitment. Finally, the commitment advised Mr. Solano that he could obtain
a copy of the actual policy form upon request.
On March 14, 2001, Thomas Vogt, a registered land surveyor, completed
a survey of the land subject to the contract. The survey noted that the
property was an unrecorded plat and gave only a metes and bounds description
of the property, rather than the lot and block description contained in Mr.
Solano’s contract with Alpha Development.
Appellant alleges that in April 2001, while she was out of state, Mr.
Solano was told that the contract on the house needed to be emergently
finalized and closed. Vanessa McCaffrey, a closing agent with the Brown Law
Firm, acted on behalf of appellees on the date the transaction closed. Appellant
3 … The commitment also stated that a title policy would be issued upon compliance with certain delineated conditions and upon payment of a premium.
4 asserts that upon arriving at the closing, Mr. Solano was instructed that he had
the authority to sign closing documents on behalf of appellant and was told to
sign his and appellant’s names to the documents. During closing, Mr. Solano
signed (apparently on behalf of both appellant and himself) a U.S. Department
of Housing and Urban Development (HUD) settlement statement which
designated the property by its erroneous lot and block description. The HUD
settlement statement listed Alpha Development as the seller, Cendant Mortgage
as the lender, and Commonwealth Land and Title as the settlement agent.
That same day, Mr. Solano represented that prior to closing, he had
received Vogt’s survey and the title commitment. He also acknowledged that
(1) the property “is, or may be, subject to zoning laws, regulations and
ordinances, and/or building codes of municipal, county, and other governmental
authorities,” (2) the policy excluded “from coverage loss caused by the exercise
of governmental policy power of the enforcement or violation of any law or
government regulation, including building and zoning ordinances,” and (3) he
had been “advised to seek the advice of competent real estate counsel.” 4 Upon
closing the transaction, Alpha Development transferred a warranty deed to Mr.
Solano and appellant which described the property by metes and bounds. The
4 … Nothing in the record indicates that Mr. Solano obtained counsel to complete the real estate transaction.
5 final title policy issued to the Solanos excluded from coverage any “loss caused
by the exercise of governmental police power . . . or violation of any law or
government regulation,” specifically including “land division,” and also
contained several other exclusions and exceptions.
The Solanos sued appellees as well as Thomas Vogt (the surveyor),
Cendant Mortgage Corporation, the Brown Law Firm and Steven S. Brown (the
title agent and the preparer of the closing documents), Vanessa McCaffrey (the
notary at closing), and Alpha Development.5 The petition alleged that, in
various ways, these parties (individually and sometimes collectively) committed
common law fraud, statutory fraud, negligence, negligent misrepresentation,
and violations of the DTPA and that they also breached their fiduciary duties
and their respective alleged contracts with the Solanos. The petition
specifically alleged that appellees failed to inform the Solanos that the property
was not legally platted or suitable for housing, erroneously represented that the
property was correctly platted, and forced Mr. Solano to sign closing
documents on behalf of appellant.
5 … On November 29, 2005, the Solanos filed their second amended petition against these parties. The Solanos filed their original petition in March 2003 and an amended petition in April 2005; however, neither pleading is contained in the clerk’s record on appeal.
6 The Solanos claimed that because of these acts, they could not obtain
proper permits for the property and they therefore could not properly construct
or use the property as their residence. 6 They also asserted that the land they
had purchased did not contain as many acres as they had been led to believe.
In their petition, the Solanos requested damages and also asked the trial court
to declare their promissory note and deed of trust invalid. In response to the
second amended petition, in March 2006 appellees filed an answer in which
they generally denied the Solanos’ claims, pleaded several affirmative defenses
(including a release of claims through a hold harmless agreement and that the
Solanos’ losses, if any, were excluded by the terms of the title policy), and
specially excepted to portions of the petition.
In April 2006, all parties (including the Solanos through counsel) entered
into an agreed scheduling order that set deadlines for amending pleadings,
serving expert reports, completing discovery, and serving any motions for
6 … Documents submitted by appellant in her summary judgment response demonstrated that in 2002, the Tarrant County Health Department refused to approve the Solanos’ application for an on-site sewage disposal system at the Solanos’ property because the department was unable to “verify the legal description of the property.” In 2004, the department wrote the Solanos a letter stating that there had been no change to the status of the application because the property had not been “properly divided and recorded.” Appellant’s pleading indicated that the inability to install a septic system was the principal reason that appellant’s property was allegedly uninhabitable.
7 summary judgment. On June 19, 2006, through a rule 11 agreement, counsel
for appellant and appellees agreed to extend the deadline for service of motions
for summary judgment until July 21, 2006 (fourteen days after the original
deadline).
On July 21, 2006, in accordance with the rule 11 agreement, appellees
filed (in one document) traditional and no evidence motions for summary
judgment on all of the Solanos’ claims against them. In support of the
traditional motion, appellees attached affidavits and provided supporting
documentation related to the Solanos’ real estate transaction. In the no
evidence motion, appellees listed each cause of action which had been pled by
the Solanos, specified the elements required to sustain such claims, and
asserted that the Solanos had no evidence to support these elements.
The Solanos filed a pro se response (comprising approximately 600 pages
of argument interspersed with various documents related to the Solanos'
transaction) which reiterated the assertion that appellees were liable on all
elements of the Solanos’ claims and asserted that the documents and affidavits
attached to appellees’ motion were ”false,” “invalid,” and “altered.” 7 Many of
7 … At some point between the filing of their second amended petition in November 2005 and their summary judgment response in August 2006, the Solanos’ counsel withdrew. The motion and order regarding the withdrawal are not part of the record on appeal.
8 the arguments made and documents provided by the Solanos in their response
related to defendants other than appellees (who were the sole movants for
summary judgment at that time) or referred to other issues regarding appellees
than the ones contained within the Solanos’ latest pleading. Also, most of the
documents that the Solanos submitted in their response contained words and
other marks placed by appellant in an attempt to accentuate the alleged
importance of the documents’ provisions.
On August 17, 2006, appellant filed a sworn document labeled as an
attachment to her summary judgment response. In that document, she
requested more time to further respond to appellees’ motions for summary
judgment because she alleged that appellees had failed to respond to written
discovery and that the affidavits that appellees had attached to their motion
were made in bad faith. While the court’s decision on appellees’ motions
remained pending, appellant also filed various other motions requesting (among
other things) that the trial court order mediation, compel discovery, and grant
a continuance to allow her time to find new counsel. 8
8 … Though these motions are described by a letter appellant delivered to the trial court, the majority of the motions are absent from our appellate record.
9 On August 28, 2006, the trial court granted appellees’ motions. In the
next few months, appellant filed several documents asking the trial court to
reconsider its summary judgment ruling. Among other contentions, appellant
alleged in these documents that she should have been given more time to seek
counsel, that the trial judge improperly evaluated the summary judgment
evidence, and that appellees’ motions were filed in bad faith and in violation of
her interpretation of the June 19, 2006 rule 11 agreement.
On October 31, 2006, in one filing, appellant submitted a traditional
summary judgment motion against all of the defendants in the underlying suit,
along with an “answer to all summary motions filed by defendants” and another
request that the trial court “reconsider [the] motion granted to [appellees].”
The filing comprised more than 1,500 pages of further arguments and
documents related to the Solanos’ transactions.
In December 2006, after appellant had filed assorted other documents
(including “questions for the jury” and a proposed jury charge), appellees filed
a motion to sever the claims against them from the claims remaining against the
other defendants, thereby making final the summary judgment that the trial
court had granted in their favor. After appellant objected and the trial court
conducted a hearing, the trial court granted appellees’ severance motion.
10 Among various other motions and documents, appellant then filed a motion for
new trial (which was denied following a hearing) and perfected this appeal.9
The Granting of Appellees’ Summary Judgment Motions
In her sole preserved issue, appellant contends that the trial court
improperly granted appellees’ summary judgment motions because the
“evidence does not support the verdict of the trial court about violations of the
DTPA, and the questions about fraud.”
When a party moves for summary judgment under both rules 166a(c) and
166a(i) of the rules of civil procedure, we will first review the trial court’s
judgment under the no evidence standards of rule 166a(i). See Tex. R. Civ. P.
166a(c), (i); Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004).
If appellant failed to produce more than a scintilla of evidence under those
standards, then there is no need to analyze whether appellees’ summary
judgment proof satisfied the rule 166a(c) burden. See Ford Motor Co., 135
S.W.3d at 600.
After an adequate time for discovery, the party without the burden of
proof may, without presenting evidence, move for summary judgment on the
ground that there is no evidence to support an essential element of the
9 … The appeal was perfected for appellant, but not for Mr. Solano.
11 nonmovant’s claim or defense. Tex. R. Civ. P. 166a(i). The motion must
specifically state the elements for which there is no evidence. Id.; Johnson v.
Brewer & Pritchard, P.C., 73 S.W .3d 193, 207 (Tex. 2002). The trial court
must grant the motion unless the nonmovant produces summary judgment
evidence that raises a genuine issue of material fact on the challenged
elements. See Tex. R. Civ. P. 166a(i); Sw. Elec. Power Co. v. Grant, 73
S.W.3d 211, 215 (Tex. 2002).
When reviewing a no evidence summary judgment, we examine the entire
record in the light most favorable to the nonmovant, indulging every reasonable
inference and resolving any doubts against the motion. Sudan v. Sudan, 199
S.W.3d 291, 292 (Tex. 2006). If the nonmovant brings forward more than a
scintilla of probative evidence that raises a genuine issue of material fact, then
a no evidence summary judgment is not proper. Moore v. K Mart Corp., 981
S.W.2d 266, 269 (Tex. App.— San Antonio 1998, pet. denied). Less than a
scintilla of evidence exists when the evidence is so weak that it does nothing
more than create a mere surmise or suspicion of a fact. Kindred v. Con/Chem,
Inc., 650 S.W.2d 61, 63 (Tex. 1983). More than a scintilla of evidence exists
when the evidence would enable reasonable and fair-minded people to reach
different conclusions. Ford Motor Co., 135 S.W.3d at 601. In reviewing the
trial court’s decision, we may only consider the material on file as of the time
12 the summary judgment was granted. Brookshire v. Longhorn Chevrolet Co.,
788 S.W.2d 209, 213 (Tex. App.—Fort Worth 1990, no writ).
Pleadings, even if sworn to, do not constitute summary judgment proof.
Laidlaw Waste Sys. (Dallas), Inc. v. City of W ilmer, 904 S.W.2d 656, 660
(Tex. 1995). However, the parties’ pleadings control the evidence and
arguments which are properly considered in a summary judgment decision. See
SmithKline Beecham Corp. v. Doe, 903 S.W.2d 347, 354–55 (Tex. 1995); Ely
v. Gen. Motors Corp., 927 S.W.2d 774, 782 (Tex. App.—Texarkana 1996, writ
denied) (explaining that the pleadings “frame the issues involved in ruling upon
the summary judgment motion”); Leinen v. Buffington’s Bayou City Serv. Co.,
824 S.W.2d 682, 685 (Tex. App.—Houston [14th Dist.] 1992, no writ)
(upholding the trial court’s refusal to consider a plaintiff’s claim which was not
pled at the time of the summary judgment hearing).
In this case, at the time appellees’ filed their motions for summary
judgment, appellant’s petition contended that appellees were liable under the
various legal theories pled only because they (1) failed to inform the Solanos
that the property was not legally platted or suitable for housing, (2) generated
documents (particularly the HUD settlement statement) that used nonexistent
lot and block numbers and therefore erroneously represented that the property
was correctly platted, and (3) falsely represented that Mr. Solano had authority
13 to sign closing documents on behalf of appellant and forced him to sign the
documents. We will restrict our analysis of the summary judgment evidence
presented 1 0 and of the trial court’s decision regarding that evidence to these
three particular allegations in relation to appellees’ no evidence motion on
appellant’s DTPA and fraud claims.11 See Ely, 927 S.W.2d at 782; Leinen, 824
S.W.2d at 685.
Appellant’s second amended petition alleged that appellees violated the
DTPA through several specific provisions. Specifically, appellant alleged that
appellees violated section 17.46(b)(5), (7), (12), (19), and (23) of the business
and commerce code. Tex. Bus. & Com. Code Ann. § 17.46 (b)(5), (7), (12),
10 … Though appellees submitted evidence in support of their traditional motion for summary judgment, we will not consider this evidence in reviewing the trial court’s ruling on appellees’ no evidence motion. See Binur v. Jacobo, 135 S.W.3d 646, 651 (Tex. 2004). We will also not consider for evidentiary purposes the lengthy written statements submitted in appellant's response to that motion, because such statements are not sworn to or otherwise qualified as summary judgment evidence. See Tex. R. Civ. P. 166a(c), (f) (delineating the available types of summary judgment evidence). Instead, we will only consider the documentary evidence attached to appellant’s response. See Binur, 135 S.W.3d at 651. 11 … Appellant made claims on appeal and in her response to appellees’ summary judgment motions about various matters, including but not limited to alleged improper disbursements, alleged improperly altered documents, and alleged incorrect legal descriptions of the property submitted after closing occurred. These claims are unrelated to the three claims pled against appellees, and we will not consider them in this appeal.
14 (19), (23) (Vernon Supp. 2008). These provisions respectively create violations
of the DTPA when a defendant commits false, misleading, or deceptive acts or
practices by
(5) representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which he does not;
...
(7) representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another;
(12) representing that an agreement confers or involves rights, remedies, or obligations which it does not have or involve, or which are prohibited by law;
(19) using or employing a chain referral sales plan in connection with the sale or offer to sell of goods, merchandise, or anything of value, which uses the sales technique, plan, arrangement, or agreement in which the buyer or prospective buyer is offered the opportunity to purchase merchandise or goods and in connection with the purchase receives the seller’s promise or representation that the buyer shall have the right to receive compensation or consideration in any form for furnishing to the seller the names of other prospective buyers if receipt of the compensation or consideration is contingent upon the occurrence of an event subsequent to the time the buyer purchases the merchandise or goods;
15 (23) filing suit founded upon a written contractual obligation of and signed by the defendant to pay money arising out of or based on a consumer transaction for goods, services, loans, or extensions of credit intended primarily for personal, family, household, or agricultural use in any county other than in the county in which the defendant resides at the time of the commencement of the action or in the county in which the defendant in fact signed the contract; provided, however, that a violation of this subsection shall not occur where it is shown by the person filing such suit he neither knew or had reason to know that the county in which such suit was filed was neither the county in which the defendant resides at the commencement of the suit nor the county in which the defendant in fact signed the contract.
Id.; see also id. § 17.50(a) (also requiring detrimental reliance and causation of
economic damages in DTPA claims).
Appellant also claimed that appellees committed common law fraud and
statutory fraud under Chapter 27 of the business and commerce code. To
sustain a common law fraud claim, a plaintiff must demonstrate that
(1) a material representation was made; (2) the representation was false; (3) when the representation was made, the speaker knew it was false or made it recklessly without any knowledge of the truth and as a positive assertion; (4) the representation was made with the intention that it be acted upon by the other party; (5) the party acted in reliance upon the representation; and (6) the party suffered injury.
Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 524
(Tex. 1998). To prove statutory fraud in a real estate transaction, the plaintiff
must show that there is a
16 (1) false representation of a past or existing material fact, when the false representation is (A) made to a person for the purpose of inducing that person to enter into a contract; and (B) relied on by that person in entering into that contract; or (2) false promise to do an act, when the false promise is (A) material; (B) made with the intention of not fulfilling it; (C) made to a person for the purpose of inducing that person to enter into a contract; and (D) relied on by that person in entering into that contract.
Tex. Bus. & Com. Code Ann. § 27.01(a) (Vernon 2002).
In their no evidence motion, appellees listed these elements, contended
that there was no evidence to prove any of them, and concluded that they were
therefore entitled to judgment as a matter of law. Our review of the record
indicates that there was no specific allegation in appellant’s pleading nor
summary judgment evidence to substantiate that appellees used a chain referral
sales plan or that they filed any suit based upon a written contractual
obligation. The trial court therefore properly granted the no evidence motion
on these specific DTPA grounds. See id. § 17.46 (b)(19), (23).
The remaining DTPA grounds and both the common law and statutory
fraud claims, as listed above, each require a misrepresentation which is relied
on to a plaintiff’s detriment. Because of that similarity, we will examine
whether there was more than a scintilla of evidence of appellees’ allegedly
improper conduct that could satisfy this standard.
17 Did appellees have a duty to inform appellant that the property was not legally platted or suitable for housing, and if so, did appellant present more than a scintilla of evidence that they failed to satisfy this duty?
Fraud is not limited to affirmative representations; rather, it may exist
when a defendant has a legal duty to disclose certain facts but deliberately fails
to do so. Bradford v. Vento, 48 S.W .3d 749, 755 (Tex. 2001). Whether a
duty to disclose certain information exists is a question of law. Id. In her
pleading, appellant contended that appellees had a legal duty to inform her that
the property Mr. Solano had contracted for was not legally platted or suitable
for housing.
A title insurance policy is a contract of indemnity, and the only duty
imposed by such a policy is the insurer’s duty to indemnify the insured against
losses caused by defects in title. Chicago Title Ins. Co. v. McDaniel, 875
S.W.2d 310, 311 (Tex. 1994). The issuance of a title policy does not create
a representation regarding the status of the property’s title; rather, it comprises
an agreement to indemnify the insured against losses caused by any defects in
title. Id. (holding that a title policy did not create a DTPA violation when,
despite the assurances contained in the policy, a preexisting lien existed on the
property); see Tri-Legends Corp. v. Ticor Title Ins. Co. of Cal., 889 S.W.2d
432, 443–44 (Tex. App.—Houston [14th Dist.] 1994, writ denied); Martinka
v. Commonwealth Land Title Ins. Co., 836 S.W.2d 773, 777 (Tex.
18 App.—Houston [1st Dist.] 1992, writ denied) (explaining that a “title insurance
company is not a title abstractor and owes no duty to examine title”).
In Martinka, a plaintiff sued the title company that had insured his
purchase of a residence for failing to disclose that a lis pendens 1 2 had been
filed. Martinka, 836 S.W.2d at 774–75. After the trial court granted the title
company’s summary judgment motion, Martinka contended on appeal that the
title company owed a duty to inform him of the lis pendens before issuing its
title policy. Id. at 775. The appellate court rejected Martinka’s argument,
explaining that a title company “owes no duty to point out any outstanding
encumbrances.” Id. at 777. The court reasoned that a title insurance
company,
before issuing a policy of title insurance, must necessarily take steps to inform itself of the status of the title to be insured. In the search for the information upon which must depend the decision to either issue or decline to commit itself to issue a policy, the insurance company obviously investigates the title for its own use and benefit to determine whether it will undertake the risk. The title information on which the company bases its decision relates to the condition of the title held by the grantor and is not made for the prospective grantee or lienholder to whom the policy will finally issue.
12 … A lis pendens is a document which prevents a party to litigation from transferring an interest in real property until the litigation is resolved. See Tex. Prop. Code Ann. § 12.007 (Vernon 2004); World Savings Bank, F.S.B. v. Gantt, 246 S.W.3d 299, 303 (Tex. App.—Houston [14th Dist.] 2008, no pet.).
19 Id. at 777–78 (emphasis added) (quoting Tamburine v. Ctr. Sav. Ass’n, 583
S.W.2d 942, 948–49 (Tex. Civ. App.—Tyler 1979, writ ref’d n.r.e.)). Based
on this reasoning, and on the fact that the existence of the lis pendens did not
affect the title company’s obligation to indemnify the plaintiff, the Martinka
court held that the title company had no duty to disclose the lis pendens. Id.
at 778–79. In other words, “[a]lthough the insurer must examine the title (or
have someone do so on its behalf), this investigation is done for the insurer’s
own information in order to determine whether or not it will commit itself to
issue a policy. The investigation is not done for the benefit of the party
insured.” Stewart Title Guar. Co. v. Cheatham, 764 S.W.2d 315, 320 (Tex.
App.—Texarkana 1988, writ denied).
It is undisputed by appellees that during their investigation into the
property at issue, they learned that the property was unplatted. However,
based on the precedent cited above, we hold that the relevance of this
discovery was limited to appellees’ decision on whether to insure the property,
and that the appellees therefore had no legal duty to disclose the unplatted
nature of the property to appellant.
Our holding is further supported by Texas precedent which explains that
“the concept of ‘title’ speaks to ownership of rights in property, not to the
condition or value of the property. Thus, a defect in, or encumbrance on, title
20 (such as would trigger coverage under a title insurance policy) must involve a
flaw in the ownership rights in the property.” Hanson Bus. Park, L.P. v. First
Nat’l Title Ins. Co., 209 S.W.3d 867, 870 (Tex. App.—Dallas 2006, pet.
denied). Appellant’s pleading does not contend that the unplatted nature of the
property at issue deprived her of any ownership right in the property which was
covered by her title policy; rather, it asserts that the property being unplatted
(coupled with associated governmental regulations on the property) prevented
her from the use of the property as a residence. 13 For this reason as well, we
conclude that appellees, in their limited role as a title indemnitor, had no duty
13 … We note that the record fails to indicate that appellant has made any claim against appellees for a violation of the title policy they issued. This may be because the losses the Solanos allegedly sustained may not have been covered under the policy. Summary judgment evidence submitted by appellant established that at closing, Mr. Solano understood that his title insurance policy excluded “from coverage loss caused by the exercise of governmental policy power or the enforcement or violation of any law or government regulation, including building and zoning ordinances and laws and division . . . and [he realized] these could affect [his] ability to build improvements on the property.” He therefore agreed to “hold harmless” appellees if such conditions prohibited him “from using the . . . property in any of the ways” he desired. The actual title policy which appellees issued contained similar excluding language. Appellant’s pleading specifically alleged that, resulting from the unplatted nature of the property, the harm the Solanos suffered was that the “construction of the home and the type of permits needed for a home was prohibited by county ordinance and city zoning laws.”
21 to disclose the unplatted condition of the property at issue.14 See McDaniel,
875 S.W.2d at 311. Because the only pled theories under the DTPA all
required affirmative representations, because fraud by a failure to disclose
requires a legal duty to disclose, and because we have concluded that appellees
had no such duty, appellees’ nondisclosure cannot form the basis of appellant’s
fraud or DTPA claims. See Bradford, 48 S.W.3d at 755; W.L. Lindemann
Operating Co. v. Strange, 256 S.W.3d 766, 776 (Tex. App.—Fort Worth 2008,
pet. filed) (requiring a duty to disclose for fraud by concealment or
nondisclosure).
Moreover, even if appellees did have a duty in this respect, the summary
judgment evidence submitted by appellant indicates that before closing
occurred, Mr. Solano was presented with documents disclosing the unplatted
condition of the property. For instance, the survey provided pursuant to Mr.
Solano’s contract with Alpha Development described the property as an
“UNRECORDED PLAT” and proceeded to contain a metes and bounds
description of the property. Appellant acknowledges in her pleading and in her
14 … Our holding in this regard is limited to the duties created within a title insurance relationship, and we express no opinion here on whether other parties to the Solanos’ transaction may have had a duty to disclose the unplatted nature of property being purchased.
22 summary judgment evidence that Mr. Solano received a copy of the survey prior
to closing.
Additionally, the Solanos’ real estate contract with Alpha Development
indicated that Mr. Solano had seven days after receiving the survey to review
it and to object to any matters that it disclosed, and that upon such an
objection, Alpha Development would extend closing and cure the objections.
Another provision of the contract indicated that closing would occur within
seven days after objections “to matters disclosed in the . . . survey have been
cured.” We find nothing in the record indicating that any objection was made
to the survey’s unrecorded, metes and bounds description of the property.
For all of these reasons, the alleged failure of appellees to disclose to
appellant that the property was not legally platted or suitable for housing
cannot form the basis of appellant’s fraud or DTPA claims.
Did appellant present more than a scintilla of evidence that appellees erroneously represented that the property was legally platted and that this representation was relied upon?
Despite having no duty to disclose title defects, a title company can be
liable for affirmative representations that cause damages to the insured. See
McDaniel, 875 S.W.2d at 311; First Title Co. of Waco v. Garrett, 860 S.W.2d
74, 76 (Tex. 1993); 3Z Corp. v. Stewart Title Guar. Co., 851 S.W.2d 933, 937
(Tex. App.—Beaumont 1993, writ denied) (stating that the “law is settled that
23 a title company does not owe a duty to the insured to discover and disclose a
title defect,” but that a “title company has a duty to know if its representations
are true”). Appellant’s pleading alleged that appellees provided closing
documents to Mr. Solano that contained erroneous lot and block descriptions
of the property and that these documents misled him as to the property he was
purchasing.
In her response to appellees’ motion, appellant included a copy of the
HUD settlement statement, signed by Mr. Solano, which refers to the property
by a lot and block number in the “HILLS OF GILMORE CREEK ADDITION . . .
FORT WORTH, TEXAS.” 15 Appellees have acknowledged that they provided
this document to Mr. Solano at closing, and they have not disputed that the
document’s recitation of the lot and block number is incorrect.
In their summary judgment motion as to appellant’s claims under the
DTPA and of common law fraud and statutory fraud, appellees contended that
15 … Though appellant attached hundreds of pages of other documents to her summary judgment response, she did not provide an adequate explanation through evidence as to which of these documents Mr. Solano received prior to closing. Because of this, and because the HUD settlement statement is the only document specifically mentioned in appellant’s pleading regarding the alleged misrepresentation of the status of the property, we will focus on this document in our evaluation of this issue.
24 there was no evidence that the Solanos relied on any material representation.
As is described above, reliance is required as an element of all of these claims.
From our review of the record, we have located no evidence provided in
appellant’s summary judgment response establishing that, though the property
description in the HUD settlement statement may have been incorrect, Mr.
Solano relied on this specific description in closing the transaction or that he
even noticed that the description was contained in the statement. For instance,
appellant provided no affidavit or deposition transcript in which Mr. Solano
explained his reliance on the statement (or on any document submitted to him
at closing). Nor has appellant explained how any other documents in the
summary judgment record qualify as evidence of reliance. 16
For this reason, summary judgment was properly granted on appellant’s
DTPA and fraud claims on the basis of appellees’ alleged misrepresentation.
See Wayment v. Tex. Kenworth Co., 248 S.W.3d 883, 886 (Tex. App.—Dallas
2008, no pet.) (affirming the granting of summary judgment on a DTPA claim
because the plaintiff did not satisfy its burden to present some evidence of
16 … Again, we express no opinion on whether any evidence exists that the Solanos may have detrimentally relied on representations made by other parties to their transaction. W e merely conclude that no evidence was submitted to the trial court that demonstrated reliance on any misrepresentation made by appellees.
25 reliance); Head v. Finley, No. 02-03-00296-CV, 2004 WL 1699895, at *5–6
(Tex. App.—Fort Worth July 29, 2004, pet. denied) (mem. op.) (upholding the
granting of summary judgment in a case concerning a real estate transaction on
the plaintiff’s DTPA, fraud, and statutory fraud claims because the plaintiff
failed to produce any evidence of reliance).
Appellant's pleading also contained a DTPA claim against appellees based
on their alleged unconscionable actions. See Tex. Bus. & Com. Code Ann. §
17.50(a)(3). Appellees challenged this claim specifically in their no evidence
motion.
An unconscionable action under the DTPA requires an “act or practice
which, to a consumer’s detriment, takes advantage of the lack of knowledge,
ability, experience, or capacity of the consumer to a grossly unfair degree.” Id.
§ 17.45(5) (Vernon Supp. 2008); see Bradford, 48 S.W.3d at 760 (adding that
an unconscionable act under the DTPA is one that is “glaringly noticeable,
flagrant, complete and unmitigated”). Having determined that appellees had no
duty to disclose the unplatted nature of the property, that Mr. Solano was
nonetheless provided with a document indicating that the property was
unplatted, and that no evidence of reliance was presented by appellant on any
misrepresentations, we also conclude that there was no evidence presented
26 which would satisfy the unconscionable standard and that the trial court
properly granted summary judgment on this basis.
Did appellant present more than a scintilla of evidence that appellees forced Mr. Solano to forge appellant’s signature on documents at closing?
Finally, the Solanos’ pleading contended that appellees defrauded them
by requiring Mr. Solano to forge appellant’s signature on several closing
documents and by issuing the title insurance policy based on those forgeries.17
If a person signs another’s name to a document with authority to do so,
there is no forgery. See In re Estate of Flores, 76 S.W.3d 624, 630 (Tex.
App.—Corpus Christi 2002, no pet.) (explaining that “forgery is defined as
altering, making, completing, executing, or authenticating a writing so that it
purports to be the act of another who did not authorize that act”); First Coppell
Bank v. Smith, 742 S.W.2d 454, 460 (Tex. App.—Dallas 1987, no writ),
overruled on other grounds, Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671,
678 (Tex. 2000) (concluding that forgery was established because the witness
testified “unequivocally that she did not authorize anyone to sign her name to
the deed of trust”); see also Tex. Penal Code Ann. § 32.21(a)(1)(A)(i) (Vernon
17 … Although no evidence was submitted in appellant’s summary judgment response directly establishing that she was not at closing, attorneys for two defendants acknowledged during a hearing that she was not present. For the purposes of this appeal, we will therefore assume that Mr. Solano signed appellant’s name to closing documents, as she alleges.
27 Supp. 2008). An individual has the authority to sign a spouse’s name to a
document when acting as an agent for that spouse. See Tex. Fam. Code Ann.
§ 3.201(a)(1) (Vernon 2006); Nelson v. Citizens Bank and Trust Co. of
Baytown, Tex., 881 S.W.2d 128, 131 (Tex. App.—Houston [1st Dist.] 1994,
no writ) (noting however that a “spouse does not act as an agent for the other
spouse solely because of the marriage relationship”).
In their motion, appellees contended that there was no evidence that
appellant’s signature was forged at their insistence or that any act undertaken
for appellant was done without her knowledge and consent. Our review of the
record indicates that appellant submitted no affidavit or other summary
judgment evidence in response to appellees’ motion which indicated that her
husband did not have the authority to sign closing documents on her behalf.
While some of appellant’s unsworn arguments in her response at the trial level
and some of appellant’s statements during her argument at the hearing on
appellees’ motion contend that no such authority was given, these statements
cannot be considered as summary judgment evidence in opposition to appellees’
no evidence motion.18 See Medford v. Medford, 68 S.W.3d 242, 247 (Tex.
18 … Documents submitted by appellant in her summary judgment response indicate instead that near the time that closing occurred, the Solanos collectively intended to finalize the transaction. For instance, in late March 2001, just a few weeks before closing occurred, Mr. Solano signed a power of
28 App.—Fort Worth 2002, no pet. ) (stating that “[u]nauthenticated or unsworn
documents, or documents not supported by any affidavit, are not entitled to
consideration as summary judgment evidence”); Madeksho v. Abraham,
W atkins, Nichols & Friend, 57 S.W.3d 448, 455 (Tex. App.—Houston [14th
Dist.] 2001, pet. denied) (noting that conclusory arguments contained in a
response to a summary judgment motion are not evidence); Quanaim v. Frasco
Rest. & Catering, 17 S.W.3d 30, 42 (Tex. App.—Houston [14th Dist.] 2000,
pet. denied) (explaining that “neither the motion for summary judgment, nor the
response, even if sworn, is ever proper summary judgment proof”).
There was also no competent evidence submitted in appellant’s response
to appellees’ motion to substantiate the other allegations contained in
appellant’s pleading related to the alleged forgery: that appellees told Mr.
Solano that an emergency closing was required, that Mr. Solano questioned
whether he had the authority to sign for appellant, that appellees told Mr.
Solano that because Texas is a community property state, he automatically had
authority to sign for appellant, or that they insisted that he sign the documents
on her behalf. The mere pleading of these allegations was insufficient to defeat
attorney authorizing appellant to act in his behalf in executing documents related to the property. Also around that time, the Solanos jointly signed a waiver of the builder's requirement to supply a list of subcontractors and suppliers upon the commencement of construction at the property.
29 appellees’ no evidence motion. See Laidlaw Waste Sys., Inc., 904 S.W.2d at
660. Therefore, the trial court properly granted appellees’ no evidence motion
for summary judgment on this basis as well.
Because the record establishes that appellees moved for a no evidence
summary judgment on the DTPA and fraud theories that had been pleaded
against them, and because appellant failed to present more than a scintilla of
competent summary judgment evidence to substantiate these claims, the trial
court properly granted appellees’ motion. Appellant’s only preserved issue is
overruled.
Conclusion
Having overruled appellant’s only preserved issue, we affirm the trial
court’s judgment.
PER CURIAM
PANEL: LIVINGSTON, DAUPHINOT, and MCCOY, JJ.
DELIVERED: December 4, 2008